CF Corp., an investment firm based in the Cayman Islands, has agreed to acquire Fidelity & Guaranty Life, a midsize issuer of life insurance and indexed annuity products, for $31.10 per share in cash.
The total value of the deal could be about $1.8 billion, and CF Corp. will also assume $405 million in Fidelity & Guaranty Life debt, the companies said today in the deal announcement.
Fidelity & Guaranty Life is now based in Des Moines, Iowa. It has large offices in Baltimore, its previous headquarters city, and in Lincoln, Nebraska.
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William P. Foley II, the co-chairman of CF Corp., said that his company wants to keep Fidelity & Guaranty Life’s current operations in place in those three cities. Chris Littlefield, Fidelity & Guaranty Life’s president, and other company executives would continue to run the company, Foley said.
Foley said CF is hoping “efficient structuring and improved investment management capabilities” will help Fidelity & Guaranty Life generate attractive returns while continuing to provide retirement savings products.
Fidelity & Guaranty
A property-casualty insurer founded Fidelity & Guaranty Life in 1959.
Old Mutual P.L.C., a large insurer now based in the United Kingdom, acquired the company in 2001 and used it as a base for entering the U.S. indexed annuity market.
HRG Group Inc., a New York-based investment firm, acquired control over Fidelity & Guaranty Life in 2011. HRG, which is still the company’s largest shareholder, put its stake in Fidelity & Guaranty Life up for 2015, after losing money on a loan to Radio Shack.
Fidelity & Guaranty Life has a fiscal year that starts Oct. 1. The company reported $22 million in net income for the first quarter of calendar year 2017 on $375 million in revenue, up from $9 million in net income on $233 million in revenue for the first quarter of 2016.
The company’s annuity sales increased to $732 million, from $601 million.
Indexed universal life sales increased to $14 million, from $11 million.
Total assets under management increased to $20.2 billion, from $18.5 billion.
Anbang Insurance Group Co., a Chinese company, agreed to acquire Fidelity & Guaranty Life. The deal fell through in April, after the companies had trouble getting regulatory approval for the deal.
CF Corp. identifies itself as a company that’s based in the Cayman Islands. It lists Las Vegas as its headquarters in the press release announcing the Fidelity & Guaranty Life deal.